Why Transportation Costs Too Much, 39 Hypotheses and Counting

Late last year I provoked a bit of a fury with Transportation costs too much and the main follow-up Is transport too expensive?

For the first time, I will briefly list all of the hypotheses in one post.

My coauthors (alphabetically) include John Bedell, Peter Gordon, Michael Iacono, David King, Dick Mudge, Randal O’Toole, Lisa Schweitzer, Stephen Smith, and others who posted anonymously. It goes without saying (which means it doesn’t since I am saying it) that not everyone agrees with everything. At the bottom, I have grouped the causes into larger meta-causes where appropriate.

  1. Standards have risen [Smith’s Man of System].
  2. Principal-agent problem.
  3. Thin markets.
  4. There are in-sufficient economies of scale (Excess Bespoke Design).
  5. Projects are scoped wrong.
  6. Benefits are concentrated, costs are diffuse [Logic of Collective Action].
  7. Decision-makers are remote [Fatal Conceit].
  8. No one actually does B/C analysis.
  9. The highest demand areas for maintenance and new stock occur in places that are expensive.
  10. Project creep.
  11. Envy is a much bigger problem in public works than in personal life.
  12. Benefit cost is only as good as the integrity of the data and the analysts.
  13. Federal funds favor capital-heavy technologies and investments.
  14. Design for forecast.
  15. Planners and engineers are paid as percentage of total project cost [Principal-Agent Problem].
  16. Materials are scarcer (and thus more expensive).
  17. Regulations like ADA and environmental protection are driving up costs.
  18. Formula spending reduces the incentive or need to worry much about costs. This is obviously related to many of the other hypotheses already considered but I think deserves it’s own number.
  19. The State Aid system and associated standards.
  20. Stop/start investment.
  21. Poor commissioning.
  22. “Starchitecture”,
  23. Separation of design and build.
  24. Doing construction on facilities still in operation.
  25. Union work rules (not wages)that inhibit productivity gains through new technologies.
  26. Fragmented governance leads to large and meandering projects rather than centralized projects. Politicians have to “share the wealth” of projects. This is perhaps a cause of “project creep.”
  27. Environmental Impact Statements (Reports) lead to “lock-in”
  28. Public-private partnerships trade additional up front costs for faster construction.
  29. Open government/costs of democracy.
  30. Climate change adaptation is increasing the costs of projects.
  31.  Ratchet Effect.
  32. Baumol’s cost disease.
  33. Transit investment isn’t realizing any productivity gains from labor.
  34. Utility works are uncharged.
  35. Experience and Competence.
  36. Ethos, training and prestige.
  37. Government power.
  38. Legal system.
  39. Lack of user fee funding.

Some other points:
1. Standards arguably includes 14, 17, 19, 21, 24, 27, 29, 30,
4. Insufficient scale economies, there is some relationship to 1, since bespoke probably means higher quality (better local fitting).
5. Scoping, includes 10, 14, 22, 26

Journal of Transport and Land Use.

We are pleased to announce the Journal of Transport and Land Use.
What, you ask? Another journal amidst an already overcrowded field?
Yes, we respond enthusiastically! Several journals touch on the interaction of transport and land use; however, they do so peripherally. This new venue puts both transport and land use front and center. We seek to be the leading outlet for research at the interdisciplinary intersection of these two domains, including work from the domains of engineering, planning, modeling, behavior, economics, geography, regional science, sociology, architecture and design, network science, and complex systems.
The Journal of Transport and Land Use (JTLU) will be peer-reviewed, web-based, open-content, subscription-free, and free to contribute. All of this is enabled by support from the Center for Transportation Studies at the University of Minnesota, where the journal will be housed. The advantages of this new journal and new process are several:
1. With a rigorous peer-review process, only quality papers that meet scientific standards will be published within the journal.
2. By being web-based (and web-only), we reduce costs significantly compared with paper journals. Web-based publication allows a much faster turnaround time than paper publication. Our goal is six weeks between submission and first reviews returned to the author. Being web-based also allows the inclusion of full color graphics and multi-media content, and the inclusion of datasets with the publication.
3. By being open-content, papers published in JTLU can be freely distributed (with attribution), increasing the value of papers published in the journal, and increasing their likelihood of being used in course readers and being read by the public.
4. By being subscription-free, we overcome a fundamental problem of today’s expensive journals published by for-profit publishers, which many libraries can no longer subscribe to.
5. By being free-to-contribute, we overcome the burden of the open-content journals that charge the authors to publish their paper.
We are now soliciting papers covering topics at the intersection of transport and land use. Details about the journal, its editorial process, and paper submission can be found at the journal’s website http://www.jtlu.org .
If you are interested in organizing a special issue, please contact one of the editors.
There will be a meeting at the World Conference on Transport Research in Berkeley to discuss the journal, contact the editors for details.
We look forward to any comments, questions, or suggestions you may have.
David Levinson and Kevin Krizek
David Levinson
Richard P. Braun/CTS Chair in Transportation Engineering
Director Networks, Economics, and Urban Systems (Nexus) Research Group
University of Minnesota (612) 625-6354
Kevin J. Krizek
Associate Professor, Urban Planning & Civil Engineering
University of Minnesota (612) 625 – 7318